updated 05:50 pm EDT, Tue April 26, 2011

Google expects to make money with Fiber

Google will make money on its Google Fiber project, for which it picked Kansas City, KS. According to The Kansas City Star, 1Gbps connections won't just be a test bed for the technology behind it, but have money-making potential. Google's executive in charge of the installation in Kansas, Kevin Lo, said Google expects to make money selling Internet access in Kansas City.

"We intend to build and operate a successful business in Kansas City, KS. It's not a proof of concept. We're a business," Lo said.

Google may contract out its network to other companies that are Internet service providers rather than offer service diirectly. Google may offer the fiber-optic network for nearly the same money as customers are currently paying for 7Mbps speeds. The download speeds Google promises are between 10 and 100 times faster than what most Americans currently get. Upload speeds are between 200 and 300 times quicker than the average.

Google plans on buying access to existing but unused fiber optic lines in Kansas City, which would cost less than building such lines from scratch. But Kansas City has a broadband subscription rate that sits at five percent under the industry average. Google's fiber project may guarantee full gigabit speeds nearly all the time, despite any added traffic, however. Google also planned to offer third parties access to their own services through its network but wasn't yet announcing any partners.

The company does face another challenge, as many Kansas City residents already have bundled services from the likes of Time Warner and AT&T that include phone, cable TV and Internet access. Splitting these often raises the overall prices and might discourage many, even if they get significantly better service.

Google may also expand beyond Kansas City if its 1Gbps network proves successful, though it has so far insisted it wouldn't become a full Internet provider.